Midday Commentary: AmTrust, Maiden continue to bounce back; Deutsche Bank preferreds eyed

By Christine Van Dusen

Atlanta, Dec. 16 - Preferred shares of AmTrust Financial Services Inc. bounced back on Monday morning after analysts essentially debunked a recent web report that alleged the company had avoided disclosing certain losses, a trader said.

The company's 6¾% series A noncumulative preferreds (AFSIPA) fell as far as $17.50 after an online provider of research issued a report that said AmTrust was using discrepancies in U.S. and Luxembourg accounting practices to avoid disclosing certain losses to the Securities and Exchange Commission. The website also claimed the company was tinkering with valuations on life-settlement contracts.

New York-based AmTrust, however, issued a statement denying the claims. And late on Thursday, two directors bought 200,000 shares each of the common stock, which helped the name recover in the market.

By Monday, the shares had bumped back up to about $20.00, the trader said.

"It was probably around $21.00 before the article came out," he said. "It's making its way back."

The same was true for Maiden Holdings Ltd.'s 8.25% series A noncumulative preference shares, which took a hit after the article appeared by managing to recover somewhat on Monday. AmTrust and Maiden work together via a quota share reinsurance agreement.

The Maiden issue (NYSE: MHPA) was seen last week at $23.60. On Monday the notes traded at $24.00.

In other trading of preferreds on Monday, Deutsche Bank Contingent Capital Trust III's 7.6% trust preferred securities were among the most active. The issue was spotted at $26.13, down 16 cents on total volume of 54,670.

Wells Fargo & Co.'s 8% non-cumulative perpetual class A preferred stock, series J, was quoted at $28.55, down 6 cents on volume totaling 51,913.

And Omnicare Capital Trust II's 4% trust Piers were also busy on Monday morning, trading at $72.84, up 93 cents on volume totaling 50,275.

"Other than that, it's pretty quiet out there," the trader said. "There's no talk of new issues coming today. I don't know if we're going to see anything this week."

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